B2B companies are embracing e-Commerce across the board, with more and more brand manufacturers and wholesale distributors choosing to add an online sales channel to their business. According to Forrester, B2B e-Commerce will exceed $1 trillion and account for 12% of all B2B sales in the US by 2020. At the end of 2015, e-Commerce is expected to reach $780 billion and represent 9.3% of total B2B sales in the US.
This trend is driven chiefly by the desire of B2B companies to decrease the costs involved in serving clients, as well as to attract new customers. Other factors come into play, of course. We’ve summarized the top 5 reasons that manufacturers are turning to B2B e-Commerce and how it's changing their business.
Greater sales efficiency
A B2B e-commerce online storefront saves time and money inherent in processing orders by phone, fax, or e-mail, for both manufacturers and buyers. All up-to-date product information is available in one place and orders can be placed easily anytime, anywhere, eliminating communication gaps and order entry errors. Furthermore, by integrating to the brand manufacturer's ERP system all pricing, inventory, and fulfillment information is accurate presented at all times.
Research shows that online orders are approximately 30% bigger. With an optimized customer service and ordering process, buyers not only order more, they order more frequently. Another important revenue-booster is cross-selling and upselling opportunities. For example, a B2B customer searching for a specific jacket is presented with related accessories on the side of the page and is motivated to take a look at your other offerings. Instead of ordering ten items, they buy 20, 50 or more. Furthermore, the availability of a 24/7 online store opens the door to new customers and new markets — without all the sales legwork.
Better customer service for retail stores
As opposed to dealing with their suppliers during business hours only, retail stores use the B2B e-commerce storefront to find the information they need and place orders on a self-serve basis, 24/7. Buyers peruse catalogs at their own pace and get a personalized online experience, seeing only those products relevant to them, with their specific pricing and all supportive information they need to make informed buying decisions. They can also quickly re-order their best-selling products, duplicate prior orders, and even work offline in a mobile storefront app when internet connectivity is not available. With familiar B2C-like navigation, the ordering and check-out process is streamlined, quick and easy.
Reduced costs, fewer mistakes, less rework, greater productivity
Online orders are processed automatically when your B2B online storefront is integrated to your backend ERP and accounting systems. Paperwork and back-office data entry is made redundant, meaning fewer errors, less time spent on processing orders and consequently lower costs. This benefits not only the B2B seller, but also their retail customers and even their customers’ clients. By eliminating the time spent on taking small orders or reordering, sales reps are freed to focus on strategic clients, business development, handling complicated orders, and enhancing service for their top customers.
Omni-channel experience ensures customer loyalty
Forrester also reports that omni-channel customers spend more than single-channel, offline-only customers. For example, 60% of B2B companies report that their B2B buyers spend more overall when those customers interact with multiple channels. Ensure that the buying experience is consistent across channels – product images, product information, in-stock visibility and pricing should be consistent no matter which channel the B2B buyer interacts with. Omni-channel B2B customers are also more likely to become repeat and long-term customers, giving their wholesale distributors a decisive competitive edge.
By launching online stores, manufacturers are seeing not only more orders, but increased sales margins, due to lower cost of sale. This enables their sales teams to focus on more strategic initiatives that boost sales and improve customer satisfaction.
All this does not mean, however, that e-commerce is a substitute for personal contact with a sales representative. Manufacturers with an online sales portal or mobile storefront app will save time on processing straightforward orders and requests such as reorders. Buyers want the flexibility of an online store when they choose to use it but also access to a real person when they need one. Viewed this way, a B2B e-commerce shop does not replace the sales rep, but is rather a key component in an omni-channel approach.